In a routine quarterly revision, the Ministry of Finance has updated the interest rates on small savings schemes for the July to September 2025 quarter. These rates play a critical role in the investment decisions of millions of Indians, especially middle-class families, senior citizens, and conservative investors.
The new rates, effective from July 1 to September 30, 2025, reflect the government’s balancing act between maintaining attractive returns for savers and managing fiscal prudence.
Revise small saving schemes Interest Rates for Q2 FY 2025 (July–September)
| Small Savings Scheme | Interest Rate (Annual) | Change from Previous Quarter |
|---|---|---|
| Public Provident Fund (PPF) | 7.1% | No change |
| National Savings Certificate (NSC) | 7.7% | No change |
| Senior Citizens Savings Scheme (SCSS) | 8.2% | No change |
| Sukanya Samriddhi Yojana (SSY) | 8.2% | No change |
| Kisan Vikas Patra (KVP) | 7.5% (matures in 115 months) | No change |
| Post Office Monthly Income Scheme | 7.4% | No change |
| Post Office Time Deposit (1 year) | 6.9% | No change |
| Post Office Time Deposit (5 year) | 7.5% | No change |
| Post Office Savings Account | 4.0% | No change |
| 5-Year Recurring Deposit | 6.7% | No change |
What Are Small Savings Schemes?
Small savings schemes are government-backed investment products that offer fixed returns and are considered low-risk. These include the PPF, NSC, SSY, SCSS, and Post Office schemes, which are particularly popular among salaried individuals, senior citizens, and rural investors due to their safety and tax-saving benefits.
Why No Change in Interest Rates?
The government has kept the rates unchanged for this quarter, reflecting stability in inflation and market interest rates. Experts believe that the decision provides consistency for long-term savers while giving the Reserve Bank of India room to focus on broader monetary policy goals.
Expert Opinion
Financial planners suggest that investors looking for secure and tax-efficient returns can continue investing in small savings schemes. “The PPF and SSY remain two of the best long-term savings instruments with EEE (Exempt-Exempt-Exempt) tax status,” said Anil Mehta, a certified financial advisor.
Final Words
With unchanged rates, small savings schemes continue to be a reliable investment avenue for risk-averse investors. While returns are modest compared to equity markets, the government guarantee and tax benefits make them a vital part of every Indian’s financial portfolio.
